Taking on the world with a product or service takes planning and hard work, as Gary Kleyn explains.
Taking on the world with a product or service takes planning and hard work, as Gary Kleyn explains.
EVEN with government support programs and grants, and the advice of organisations such as the Chamber of Commerce and Industry, the risks inherent in exporting to a foreign land are significantly greater and conceivably more expensive than sticking to local markets.
A good starting point for prospective exporters is to take a look at the annual International Trade Handbook, which has been produced by the International Trade Centre at the CCIWA for the past 12 years.
The handbook provides information on a range of issues, including a chapter on steps to successful exporting.
The first step is to carry out a self-assessment. It is important to consider the commitment of the business and the management needed to develop exports. “You must take a long-term view,” the handbook says.
It is equally important to assess the product or service to determine its export potential. And it is also vital to have a strong marketing knowledge and the finance to back the export venture.
The second step is to consult with the bank to gain an understanding of international finance. Costs for exporting, transport, packaging requirements and legal and taxation issues should also be discussed with various experts.
The third step is to become familiar with common terminology used in international trade.
Step four is to begin carrying out some desk research. “Select one or two markets and undertake desk research to identify their characteristics,” the handbook says.
“Historically, Australian companies in the initial stages have shown a preference to select smaller and less complex markets such as New Zealand, Papua New Guinea, Fiji and Singapore,” the handbook says.
In making a detailed market study, the following should be considered.
p Whether the country selected already imports the product.
p What import duties the product may attract.
p Frequency and cost of shipping or airfreight.
p Regulations such as quarantine and labelling standards, consumer protection rules and product standards.
p Whether cultural differences need to be taken into account.
A SWOT analysis may also be useful for each market that appears to have potential. The strengths of the domestic market, the weaknesses of the domestic market, the opportunities in the foreign market and the threats in the foreign market will form part of the SWOT analysis.
Having done the homework, the fifth step is to prepare an export-marketing plan covering all the different aspects that would need to be considered when developing new markets.
The final step is to visit the target market.
“The main purpose of the visit will be to study its special characteristics, the opportunities/competition first hand and see a suitable agent or distributor,” the handbook says.
“It is advisable that first-time exporters concentrate on one market to start with, two at the most.
“If you choose a larger market like the US or Japan, it is advisable to target a region or city rather than the whole country to begin your export program. Do not rush this step.”
